The University of Aberdeen is to offer at least 150 members of staff offers of early retirement in a bid to reduce costs by £10.5 million in the next few months.
The university currently amounts 60% of its costs to payment of staff and other staff related costs. The percentage of the staff costs are significantly higher than the national average, with the figure expected to rise as the UK Government prepares to increase employer contributions to pensions and national insurance.
The university is seeking to reduce its spending by at least £10 million ahead of what is foreseen as a “very challenging” funding environment.
The university has offered settlement agreements to staff in an attempt to encourage them to end their employment with the University. Although settlement agreements can be seen as a negative thing, for many workers they can prove to be beneficial.
Such arrangements allow workers to leave with a substantial payout. Due to the unexpected termination of employment the amount offered is usually around three months wages, with a large percentage being tax-free. Such agreements can be beneficial to employers also as it allows them to reduce the amount of legal costs and reduces wages overall.
The University of Aberdeen said in a statement: “To achieve our vision and to have the necessary financial stability in a very challenging funding environment, we have determined that we need to identify, through a variety of ways, at least £10.5million as a recurrent saving within the next few months.
“We know that our staff are our greatest asset. However, it is also true that they form the largest part of our costs.”
It continued: “At present our staff costs are 59.5% of our overall budget against a sector average of 53.3%.
“This means that we have less flexibility to react to new challenges and opportunities compared to other higher education institutions."
If you require legal advice regarding any aspect of employment law or if you have been offered a settlement agreement, our team of skilled employment solicitors can help. Contact us today using our online contact form.